COMMISSIONER OF WEALTH-TAX Vs. CHANDAN

JUDGEMENT

(1.) THE present wealth -tax appeal filed under Section 27A of the Wealth -tax Act, 1957 (hereinafter referred to as 'the Act') has been admitted on the sole substantial question of law framed in the memo of appeal: Whether, on the facts and in the circumstances of the case, the learned Income -tax Appellate Tribunal was legally correct in holding the appeal filed by the Department against the order of learned Commissioner of Wealth -tax (Appeals) passed on October 30, 1992, as infructuous without considering the merits, facts and material available on records, as while passing the fresh assessment order on January 30, 1992, the Assessing Officer had brought to tax further amounts of compensation, additional compensation and solatium, etc., on the basis of these received as a result of the decision dated May 31, 1986, of the Additional District Judge, which were not assessed in the original assessment order, appeal in respect of which was decided by the learned Income -tax Appellate Tribunal on January 31, 1994 ?

(2.) AS the point and the parties in these three appeals are one and the same and have arisen out of common judgment and order dated May 21, 1999, passed by the Tribunal, as such they are being disposed of by a common order.

(3.) ALL these appeals are directed against the common order dated May 21, 1999, passed by the Tribunal for the assessment years 1985 -86 to 1987 -88. The assessment order was passed by the Assessing Authority on March 30, 1988, wherein the value of right to receive compensation was determined. The said order was set aside by the first appellate authority by order dated July 21, 1989, and it was remanded to the Assessing Officer. The order dated July 21, 1989, passed by the first appellate authority was challenged before the Tribunal and the Tribunal, vide order dated January 31, 1994, did not approve the order of the first appellate authority and set aside the same. At this stage, it will be useful to reproduce the relevant extract of the order dated January 31, 1994, passed by the Tribunal, which is as follows: We have heard both the parties carefully and have also gone through the relevant record. In our view, the learned, Commissioner of Income -tax (Appeals) erred in directing the Assessing Officer to make the award dated May, 1986, of the ADJ as the basis for determining the value of right to receive additional compensation for the purposes of assessee/s wealth. The direction of the learned Commissioner of Wealth -tax (Appeals) is contrary to the ratio of the hon'ble Supreme Court in the case of Chinoy's case that the right to receive compensation can, however, be equal to the claim actually awarded by the civil court in view of the risk of hazards of litigation. In our view, therefore, the approach of the Assessing Officer is reasonable adopting the value of right to receive additional compensation at Rs. 17.50 per sq. yd. We accordingly uphold that there was no basis with the learned Commissioner of Wealth -tax (Appeals) to direct the Assessing Officer in taking into consideration the interest and solatium ultimately awarded for the purposes of computation of such right. We accordingly direct that the directions of the learned Commissioner of Wealth -tax (Appeals) to direct that the directions of the learned Commissioner of Wealth -tax (Appeals) be ignored and the value of right to receive additional compensation as computed by the Assessing Officer is upheld. However, we direct the Assessing Officer to allow deduction of Rs. 5,83,687 actually received by the assessee as compensation till March 31, 1985, as against Rs. 2,20,251 allowed by the Assessing Officer. This disposes of the assessee's first two grounds of appeal.